How do you calculate gross profit margin?

Gross Profit Margin = ((Revenue − Cost) / Revenue) × 100. For example, if an item costs $60 and sells for $100, gross profit is $40, giving a margin of 40%.

How do you calculate markup percentage?

Markup Percentage = ((Revenue − Cost) / Cost) × 100. If an item costs $50 and sells for $75, the profit is $25, and markup is ($25 / $50) × 100 = 50%.

Profit Margin & Markup Calculator

Q: What is the difference between margin and markup?

Profit Margin is the ratio of profit to revenue (Profit / Revenue × 100). Markup is the ratio of profit to cost (Profit / Cost × 100). Margin can never exceed 100%, whereas markup can be well over 100%.

Calculate gross profit, profit margin percentage, and markup percentage from cost and revenue.

Cost ($)

Selling Price / Revenue ($)

Gross Profit —

Profit Margin (%) —

Markup (%) —

Formulas & Definitions

Gross Profit = Selling Price − Cost

Profit Margin (%) = (Gross Profit / Selling Price) × 100

Markup (%) = (Gross Profit / Cost) × 100

Frequently Asked Questions

What is the difference between margin and markup?

Margin represents the percentage of total sales revenue that is profit. Markup represents the percentage added on top of your item cost to reach your selling price. For example, a 50% margin equals a 100% markup.

Can profit margin be greater than 100%?

No, profit margin cannot exceed 100% unless cost is negative. However, markup can easily exceed 100%, 200%, or 500% when selling high-margin items.

What is a good profit margin for retail and eCommerce?

Average gross margins for retail and eCommerce typically range between 50% and 70%, with net margins after operational overhead averaging 10% to 20%.